In
Part I, we found that General Motors (GM) was introduced to the
concept of buying up transit and replacing it with
"modern" buses thanks to the animosity towards transit of
New York Mayor Hylan and newspaper owner William Randolph Hearst
back in the 1920s. In 1974, Bradford C. Snell presented a paper to
the Senate Judiciary Committee accusing GM of collaborating with the
Nazis, wiping out electric railways, bankrupting the rest (to sell
more trucks), buying up streetcars to replace them with smelly buses
(that people wouldn’t ride so they would buy cars) and in general
being completely responsible for the miserable state of modern
transportation. Because Snell’s charges were so obviously
erroneous, respected historians and GM were able to laugh them away.
Snell’s paper served only to polarize opinions and reliance upon
its questionable erudition placed most pro-conspiracy theorists
firmly on the lunatic fringe where they could be safely ignored.

So let’s set the wayback machine
to 1933, just as new GM buses are about to show up on the streets of
New York. And when they arrived, the reception was generally
favorable as the buses could deposit their riders at the curb and
not in the middle of the street (at safety islands, like
streetcars). The buses were new, clean, and mostly comfortable (if
smaller than the streetcars they replaced). For the operators, they
came without the baggage of the past including no franchise taxes,
no requirement to pave the center of the street, no requirement to
remove snow and thus (in an artificially unfair competition) were
cheaper to operate. GM invested in three of the New York City
operators and they unsurprisingly then selected GM buses.

The
year before buses arrived, GM (significantly) formed a new
subsidiary, United Cities Motor Transport (UCMT) and looked around
to gobble up transit companies to replace its equipment with GM
buses. There were only a few smaller systems for sale so GM did
indeed acquire them and substitute buses. With so little on the
market, UCMT approached the city of Portland, Oregon, in 1933 to
replace its streetcar system with buses. However, the voters in
Portland said no and UCMT was censored by the American Transit
Association for its obviously self-serving role. UCMT operations
soon folded up.

Given the handicaps of streetcars
with the onerous paving requirements, special franchise taxes, and
other burdens, why were not more for sale? The answer is found in
the symbiotic relationship the streetcars had with the companies
that owned them – the electrical generating companies and some
connecting steam railways. The local power company built many of the
early streetcar lines. The local generator then sold bulk
electricity to the streetcar company and made a nice profit on that
sale. If its subsidiary streetcar company could also make money, so
much the better. If not, the losses could be covered through a
deduction of the utility’s federal, state, and local taxes. In a
sense, streetcars, through this arrangement, were subsidized.

So
until and unless GM could pry streetcars away from their parent
utilities or connecting railroads, very few lines would come up for
sale. What happened next is the seminal event, the turning point
where electric transit met its Waterloo. GM clearly couldn’t force
the utilities to sell its transit lines, but the Federal Government
sure could. And it did, through the passage of the Public Utility
Holding Company Act of 1935. This is contained in Title 15 Chapter 2
(c) and it is an incredibly complex law. But it had the suspiciously
useful (to GM) effect of stripping transit lines away from their
utilities (mandated to be sold by 1938) and forcing them out on
their own, to either live or die. And once separated from their
subsidies, many died on their own at the end of the depression,
without any further assistance from GM.

So for the pro-conspiracy
theorists, research into the role played by GM (if any) in the
structure of the Utility Act of 1935 would go a long way to show
that GM was indeed the "man behind the mirror." In
fairness, the utility trusts had cost investors huge sums in the
depression era bankruptcies. Indeed, many had perpetuated Enron-type
machinations through the complexities of holding companies. The
Utility Act would clean up these problems and have the possibly
unintended side effect of eliminating rapid rail transit. The
government was there to help you and General Motors.

In
any event, the Utility Act now put a large number of transit
companies on the market. In 1936, GM formed National City Lines and
aggressively began to buy transit companies and substitute diesel
buses for streetcars. Meanwhile, the transit companies themselves
were looking for ways to avoid the extra costs foisted off on them
from the days of horse cars. The quickest way was to substitute
buses for lighter density lines. Even with the extra costs,
high-density lines were still cheaper to operate electrically. Small
cities across America began to change to buses. And where GM was not
involved, they would buy from Brill, Ford, Mack and even GM.

National City Lines, with partner
Firestone Tire and Phillips Petroleum, Atlantic City Lines (with the
same) and Pacific City Lines with Standard Oil (replacing Phillips)
and Mack Truck added went on to acquire some 62 transit companies
and killed streetcars on 23 of them. It also partially eliminated
streetcar lines in Baltimore, Los Angeles (city), Oakland,
Philadelphia, and St. Louis.

That’s the official count of
National City Lines and associates. But that is not the full count.
Other cities had suspicious investors involved. Most notably,
Pacific Electric in the greater Los Angeles basin. PE had been
losing money for years and parent Southern Pacific Railroad
despaired of ever being able to beg the Public Utilities Commission
to let them stop service. The savoir for Southern Pacific was
Western Transit Systems, with Jesse Haugh as president.

Haugh was a former official with
Pacific City Lines and wandered into town with a $500,000 down
payment and $1.8 million in working capital (a considerable sum in
those days). But the sale had an interesting structure. Haugh did
not buy (he rented) the downtown subway terminal, nor did he buy
substations or certain wires or other parts related to electric
operations. The rent was not due to start for two years, so he
cleverly had a cost structure that forced an apparently reasonable
application to the PUC to end rail service. His Metropolitan Coach
Company was unabashedly pro-bus. And right away he applied for
abandonment of the lines running into the subway terminal.

Haugh apparently had a very
friendly relationship with his former employer, Pacific City Lines.
Right after his purchase, he needed new buses (to close the Subway
Terminal) and the National City Lines subsidiary, Key System,
allowed Haugh to purchase its just arrived order (brand new GMs
painted for the Key System). These were then sent down to
Metropolitan Coach and repainted for service in LA. Given that Haugh
had such a cozy relationship with National City Lines, it is fair to
say that his financial backers were likely involved with GM
(although no one has proven a connection). And Metropolitan Coach
bought a lot of buses from GM. It is ironic that one of the
frequently misstated "facts" from the Snell Report (Snell
implies that Pacific City Lines was buying PE in 1940) may actually
have some basis in truth through the affiliation of Haugh.

In 1946 another event occurred
which allowed the introduction of one of the few heroes in this
story. Meet E. Jay Quinby, a mercurial rail fan, former electric
traction employee, retired Lieutenant Commander in the Navy (World
War II), and home builder of a battery-powered electric Volkswagen.
His contribution to this story was to hand publish and expose the
owners of National City Lines (GM, Firestone, and Phillips
Petroleum) and he addressed it to "The Mayors; The City
Manager; The City Transit Engineer; The members of The Committee on
Mass-Transportation and The Tax-Payers and The Riding Citizens of
Your Community." In 1946, he sent his 36-page analysis, which
began: "This is an urgent warning to each and every one of you
that there is a careful, deliberately planned campaign to swindle
you out of your most important and valuable public utilities–your
Electric Railway System."

Quinby’s
"manifesto" would go on to link National City Lines (and
its subsidiaries) to parent owners Firestone Tires, General Motors,
Phillips Petroleum, Standard Oil of California, and Mack Truck. And
he delineated how National City Lines bought transit companies and
deliberately replaced streetcars and trolley buses with GM diesel
buses.

Quinby’s arguments went on to
detail how and why streetcars and rapid transit were preferable to
buses. He pointed out that the supposed advantage of delivering
passengers to the curb impeded the flow of traffic (the rear end of
the bus stuck out into a traffic lane in practice), eliminated curb
parking at the bus stop and that 50% of the passengers would still
have to cross the entire street. Streetcars, he noted, behaved
predictably and kept to their tracks, letting passengers off at
islands and the passengers would only have to cross one-half the
street. They used no curb space and carried 60 seated passengers in
comfort (with room for 40 more standees) instead of 48 in cramped
seats (and standing). Most particularly, he said, they are clean and
not emitting poisonous carbon monoxide, which in quantity would
render the air unfit to breathe.

Quinby’s prophetic words
extended to the following: "You will realize too late that the
electric railway is unquestionably more comfortable, more reliable,
safer and cheaper to use than the bus system. But what can you do
about it once you have permitted the tracks to be torn up? Who do
you think you can find to finance another deluxe transit system for
your city…?"

With almost sixty years of
hindsight, we can now answer that question. The taxpayers of the Bay
Area funded billions for BART. The Feds (and locals) funded billions
and billions for new electric transit systems in San Jose,
Sacramento, Los Angeles, Dallas, Washington, D.C., Baltimore,
Denver, Portland, and others–all cities whose systems had been
unwisely removed. Quinby was right. And more than being right, he
tried to do something about it and nearly succeeded.

Quinby’s charges would finally
bestir the government to begin an investigation into National City
Lines and its owners and subsidiaries and suddenly the opposition
changed their tactics (in a clear admission of guilt). NCL
Subsidiary Baltimore Traction Company quickly bought 165 buses from
the Brill Company and Los Angeles Railway bought 40 new PCC
streetcars (like the "modern" ones on today’s F line in
San Francisco).

Thanks
to Quinby’s warning, the Feds eventually took GM to trial and
convicted them not for ripping out streetcar lines, but rather for
controlling these companies to monopolize sales of its products, a
violation of the Sherman Anti-Trust Act. The participants were each
fined $5,000 (plus court costs) and senior executives were each
fined $1.00. And that was that. Unfortunately, no one sought an
answer to Quinby’s most penetrating question (referring to the
1935 Public Utility Holding Company Act), "WHO IS BEHIND THIS
CAMPAIGN TO SEPARATE THEOBVIOUSLY ECONOMICAL COMBINATION OF ELECTRIC
RAILWAY AND ITS POWER PLANT?"

National City Lines and Pacific
City Lines merged in 1948 and continued their practice of "bustitution."
Streetcars continued to suffer under the multiple handicaps of
special franchise taxes, property taxes on private right-of-ways,
paving charges for the center of streets, private snow removal
costs, fixed fares, and bizarre rules where, for example, some
companies had to provide city lighting along tracks in the street.
There was no question that it was harder to make money as a rail
transit provider and the bus could use the city-provided streets
literally for free.

Yet
even in that environment a study of transit systems between 1935 and
1950 by David J. St. Clair found that buses were indeed superior in
operating expenses on lighter density lines. Even then, the
comparison was not entirely fair, as the older streetcar company
provided free transfers to its buses (from streetcars), paid
extraordinary charges, and received a single fare regardless of
distance traveled. Substituting buses, the transit operator
frequently eliminated transfers and instituted a zone system that
charged based upon the distance traveled. St. Clair studied the
profitability of each system, not rules they operated under.
Interestingly enough, he found that trolley (electric overhead wire)
buses were the most profitable on medium density lines and electric
railways the best on high-density lines. Yet city transit planners
chose buses.

City planning was a relatively new
field in the 1930s and few accredited institutions taught the
subject. However, one such accredited institution did and it was GMI
(General Motors Institution which took over the Flint Institute of
Technology in 1926). And you can imagine what the fledgling city
planners learned: traffic engineering (buses are good; railways are
bad). Each year a new crop was turned loose on an unsuspecting
country. And dutiful to the education received, they did indeed
select modern buses for their towns. To be fair, other institutions
(such as M.I.T.) taught city planning, but GM was the only company
to buy such a school.

Where the tactics of buying
transit, inserting tame planners, and using trained National City
Lines stooges failed, GM would act directly. Reportedly, the
outgoing Tampa City Council was bribed with Cadillacs to vote to
scrap its municipal transit system. Other times, finance leverage
was exerted upon companies. According to Freedom of Information Act
(F.O.I.A.) documents, the transit system’s bank would get a visit
from GM promising deposits if the bank would lean on the transit
company to not buy more streetcars. Converting to bus was easy, with
the local banks assistance and, of course, easy financing from GMAC
(General Motors Acceptance Corporation). GMAC was founded in 1919 to
help auto dealers finance the bulk purchase of new cars and its role
quickly grew.

Allegedly, it was easy money from
GMAC that convinced the gangsters in control at Twin Cities Transit
to scrap its modern PCC style streetcars (to pocket the scrap sales)
and buy buses. The crooked officers eventually were convicted of
swindling and fraud, but by then the modern streetcars in
Minneapolis and St. Paul were burned for scrap.

While GM was engaged in what can
only be described as an all out attack on transit, our government
made no effort to assist traction whatsoever and streetcars began to
fade in earnest after the Second World War. In 1946, the government
began its Interstate Highway program, with lots of lobbying from GM,
arguably the largest public works project in recorded history. In
1956, this was expanded with the National Interstate Highway and
Defense Act. Gas tax funds could only be spent on more roads. More
cars in service meant more gas taxes to fund more roads. And we got
lots of roads.

More and better roads doomed the
interurban electric railways and they fell like flies. Outstanding
systems like the Chicago North Shore Line (which operated from the
northern suburbs into Chicago on the elevated loop until 1962) were
allowed to go bankrupt and be scrapped. The Bamburger between Salt
Lake City and Ogden failed with its high-speed Brill Cars in 1952.
Today, arguably only two of the vast empire of interurban systems
survived: The Philadelphia and Western Suburban Railway – aka the
Red Arrow Lines (now a part of SEPTA) and the Chicago South Shore
and South Bend Railway (now state owned). And highways had
everything to do with this extinction.

The United States government,
state agencies, and local communities allowed these systems to fail.
In the District of Columbia, Congress ordered the elimination of
streetcars over the strong objections of the local owners and
managers. The government was doing its part.

So let’s not forget the words of
Charlie Wilson when asked if there were a conflict with his former
employer (GM) on his possible appointment to Secretary of Defense in
1953. He replied, "I cannot conceive of one because for years,
I thought what was good for our country was good for General Motors,
and vice versa."

Clearly, GM waged a war on
electric traction. It was indeed an all out assault, but by no means
the single reason for the failure of rapid transit. Also, it is just
as clear that actions and inactions by government contributed
significantly to the elimination of electric traction. This was good
for GM but not particularly good for our country. E. Jay Quinby and
the rapid transit companies lost the war when it mattered and now
Quinby’s 1946 prophetic question has come back to haunt us:
"Who will rebuild them for you?"s